Decision details

This report considers the draft Treasury Management Strategy Statement and Prudential Indicators for 2018/19, prior to its submission to the Council for approval.

Regulations require the Council to prepare and formally approve both an annual Treasury Management Strategy and Prudential Indicators.  The document for 2018/19 is attached as Appendix A to this report for consideration by the Executive before being submitted to Council for approval.

CIPFA published new versions of its Treasury Management Code of Practice and the Prudential Code in late December 2017.  Due to the late publications, CIPFA recognises that changes may not be fully implemented until 2019/20 due to the lead-in time to produce the strategy.  Necause of this and because there are no changes to the format or content of the strategy, this strategy is based on the 2011 version of both Codes.

Main highlights in the Strategy are:

Capital Issues

i)    The level of capital expenditure estimated for 2017/18 is £24.7 million.  We currently estimate that £13.4million of this will be met by new borrowing.

ii)   There will be an increase in the amount of council tax contributing to the cost of capital expenditure, due to new borrowing in 2017/18 and 2018/19.

Treasury Management Issues

iii) The strategy includes a new section on operational exposures to UK banks with low credit ratings and assets, such as through current accounts, collection accounts and merchant acquiring services.  These are not classed as investments, but are still subject to the risk of a bank bail-in and balances will therefore be kept below £4m per bank

RESOLVED that the Executive:

(a)  endorses the draft Treasury Management Strategy and Prudential indicators for 2018/19, attached as Appendix A to the report; and

(b)  agrees to submit the report to Council for approval.